Being Served - but Not Working!

[spearmint]

I heard banging on my front door tonight and by the time I got to the door, whoever it was had gone. I am pretty sure I am being served by a creditor. I've been expecting it. I am petrified because I am not working so I can't pay them and I can't afford an attorney. Need advice on how to deal with this. My nerves are shot.

I posted this in the unemployment thread, too - not sure where it should go.

[btbeme]

407 posts, you are expecting to get served, and you have not yet filed? I need to go back and read your story before I (or anyone) can comment...

That is, unless you care to summarize it for us here...

[spearmint]

There are reasons I haven't filed yet.

I shouldn't say that I was "expecting" to get served but I thought it likely since I can't pay some large bills.

I suppose my story is typical. Last five years laced with periods of unemployment (as now), taxes owed, medical bills (large) owed. Lost my home, etc. etc.

I had hoped to be working and have saved a little money before I filed. A steady income would make me feel much better about filing because at least then i would be able to start to pay the taxes. Unfortunately, I can't get rid of the taxes in BK because the return isn't filed yet.

I also have another obligation that I can't get rid of in BK so I will have to pay that, too.

Things just seem to get worse and worse and I don't see a way to improve the situation.

I can't even afford to file BK!

[btbeme]

Others may want to jump in here, but if you have no assets, no income, owe the Feds (who get first place at the table), then I would say that you are pretty much collections-proof. No paycheck = no garnishment. It may take proof to get some of these weasels off your back, but the wrong thing to do is to ignore then.

As for the Feds - there are tax resolution services that may be able to help you, at little or no cost.

As for BK filing... there are a very few fees involved, which can be waived if you can show cause to waive them.

[spearmint]

I have a 20 year old sewing machine, an old car (17 years old) and a 4-year old laptop. The furniture I have is not worth anything. I have sold every piece of jewelry I had to survive the last few years.

I have been interviewing but nothing certain yet.

Do you mean I am "collections-proof" in that I cannot pay? Surely that doesn't stop me being served - or does it?

I also have a debt related to the home that I rent. The debt can be written off in BK and, although it is separate from my rent, I hate to write it off in case the landlord tries to find a reason to get rid of me just because I write it off in BK. This is another reason for the delay in filing. I wanted to move from here so that I could write it off.

Can you name some of these tax resolution services? I don't have money to pay them either, though.

I am also worried about how much of my income (if I ever have one!) the IRS can take.

I do have a company pension (small) that I have not yet started to receive. I have a couple of years before I can collect social security, too. I am worried these will get taken to pay the taxes when I do begin to pay them.

I just don't know which way to turn.

[AngelinaCat]

If you owe the IRS anything, get off your duff and call them FIRST THING IN THE MORNING. Those people are NOT ogres; they WILL work with you.

We learned this when we got a dunning--'we-will-garnish-your-paycheck'--type message ourselves before we filed BK. That would have been early 2007.

We (actually 'Hub) talked with them and set up a repayment schedule that was very reasonable. When we filed BK, the payment schedule was put into 'abeyance' until after we completed the BK. Once that was done, we set up the repayment schedule again. It started out being $450.00 a month. Due to our financial circumstances, we have had to adjust this amount downward. We now pay $100.00 a month.

But we have had NO PROBLEM at all with the IRS. The secret to that is to call them, be honest, and keep them informed of any changes in your situation.

If you sit back and 'hide', you will suffer for it.

Just my two cents from a couple who are living what you are worrying about.

[spearmint]

In 2009 I was working with an accountant to get all the returns filed - some got filed and some didn't. Since then, I have had employment issues so nothing has been done. I had also been hoping to be able to make a decent wage again so I could save the money to pay the IRS and not have to do a Chapter 13. I am not sure I can stand a Chapter 13 for five years. By the way, that accountant charged me $5,000 simply for filing a few years tax returns.

$450 a month is not too bad, although a little high for me, I think (when I am working, that is). Maybe you didn't owe them much and that's why the $450 seems reasonable to me. Does the amount go up if you earn more, perhaps if you or your husband got another job with a higher income?

At the moment, I don't know what to do about these papers I am about to get. I can't afford to file BK although another poster said that in certain circumstances the fees can be waived. But then, I can't file because I need to move to another place to live before I file and I have no money and no job to be able to do this.

I am about ready "emotionally" to file (read, "I can't take any more of the stress") but I have no way to be able to do it at the moment.

I wanted to retire in two years when I am 62 but there is absolutely no way I will be able to. At the moment, I have no income, no job and no money.

[AngelinaCat]

spearmint, the $450.00 I mentioned was for OUR situation. When you talk to the IRS people, you will be able to tell them what you can and cannot afford. Perhaps you can afford only afford $250.00. Perhaps you can only afford $100.00. But you will not know until you get on the phone and talk with them.

Now, in our situation, we have had to drop our payments three-four times, due to our financial circumstances. We started at 450, and ar now down to 100. We still owe 7K in back taxes. What do you think is happening with the interest and penalties?

Yeah, right. We won't live long enough to pay these off.

However, we are currently in the position where we have a little extra money coming in--we have no idea how long that will last. But, if it does, as soon as we have a decent emergency fund set aside, we are going to sock every single extra dollar to that IRS debt, and get RID of it.

[spearmint]

It sounds as if you do not expect to get an Offer in Compromise. I thought after two or three years of paying back, they might consider this but perhaps they don't do the OIC's these days.

Penalties and interest? I imagine they still continue to accrue until the taxes are paid even though you are on a payment plan.

Owing $7K is not too much. In a couple of years you should soon have it paid. I owe a lot more than $7K, thanks to having taken out my 401K a number of years ago and not paying the taxes (coincided with economic decline and unemployment).

I have to deal with the taxes at some point. I know that. The most obvious vehicle for doing that is Chapter 13, I believe. I have been trying to find a good time for me to file but things keep getting worse instead of better.

All the stress has taken all the energy and inspiration from my life. And now another process server is coming!

[AngelinaCat]

7K not too bad?!!! Are you kidding?? I would like to live long enough to be done with the IRS and have a bit of a decent life.

*tfChTufT*!!!!--as my favorite cat would say in her cat language curse word.

We started out owing 27k. All of the stuff we had to pay to the trustee to buy back our non-exempt stuff from the BK Estate, went to the IRS.

Any refunds, and/or stimulus checks went to the IRS. Any of our creditors who tried to contest our BK--a couple did--had to get in line behind the IRS.

Yet, I am telling you that the people are easy to deal with.

By and by it may be possible that we can get 'cut rate' or wipe-out of what is still owed, but not yet.

[spearmint]

I owe about 40K

My present worry, though, is this process server. If I get served, I can't file BK yet (because I would need to find another place to live and that takes money) and I have no money to pay an attorney.

[Pjmax]

Here's the thing Spearmint, things will keep getting worse unless you start somewhere. I would start with the taxes. There are free services to help. Even though you can't pay them now, get them done and filed. Here's a link I found that might be a good place to start: http://www.irs.gov/Individuals/Free-...-by-Volunteers

If you start taking a step in one area of your life, you'll at least feel better about taking care of something, and hopefully, it will make moving on to step 2 easier, or at least figuring out what step 2 should be a little clearer.

I hope I'm not sounding too harsh, because I do understand, I've been there. I could be wrong, if so, I apologize, but it just sounds to me like you could use a 'kick in the butt' so to speak.

[Pjmax]

If you get served, so be it. Deal with it then. It sounds like there is nothing they can collect from you at present, and high anxiety isn't going to change it. Don't ignore it when it comes, but take things one step at a time.

[spearmint]

Here's the thing Spearmint, things will keep getting worse unless you start somewhere. I would start with the taxes. There are free services to help. Even though you can't pay them now, get them done and filed. Here's a link I found that might be a good place to start: http://www.irs.gov/Individuals/Free-...-by-Volunteers

If you start taking a step in one area of your life, you'll at least feel better about taking care of something, and hopefully, it will make moving on to step 2 easier, or at least figuring out what step 2 should be a little clearer.

I hope I'm not sounding too harsh, because I do understand, I've been there. I could be wrong, if so, I apologize, but it just sounds to me like you could use a 'kick in the butt' so to speak.

Thanks for the link. It's very helpful.

I am not really stalling on filing. I am perplexed about my situation because one of the debts I owe is related to the home that I rent. The debt is not part of the rent and technically the landlord cannot evict me if I do not pay him and write it off in BK; however, we all know how things work in the real world and he could find another reason to evict me. I presently have no money whatsoever so I would not be able to find another place to live. This is the main reason for not having filed yet. As soon as I get a job and save some money to move, then I can file. This is why I am so worried about the papers that are about to be served. It's not as if I can file BK immediately. If I do that, then I may be living on the street.

[LadyInTheRed]

Spearmint, get your tax returns filed! If you had done that in 2009, the tax debt would probably be dischargeable by now.